ORIGINAL RESEARCH REQUIRES TIME: time to incubate an idea, time to conduct fieldwork, time to do rigorous analysis. And, as the saying goes, time costs money. • Enter the Ewing Marion Kauffman Foundation—the world’s largest foundation devoted to entrepreneurship—which has awarded Stanford Law School a grant to support promising legal scholars whose work is focused on law, innovation, and economic growth. One of six law schools to be awarded the grant, Stanford Law will receive $180,000 over three years to support Kauffman Legal Research Fellows.

“Research to understand linkages between the law and innovation is vital to educate courts and policymakers when making decisions that affect economic growth,” says Robert Litan, vice president of research and policy at the Kauffman Foundation. “This grant seeks to engage scholars in this important work at the beginning of their careers.”

“It’s a perfect symbiotic relationship. Where better than Stanford, after all, to invest in further understanding entrepreneurship and innovation?” says Larry Kramer, Richard E. Lang Professor of Law and Dean. “And it’s enormously helpful to the school and its students to enable them to pursue this critically important research.”

This grant builds on previous support from the Kauffman Foundation, which last year provided more than $700,000 to fund research projects exploring the intersection of law, entrepreneurship, and economic growth.

The inaugural Kauffman Legal Research Fellows are Stefania Fusco, JSM ’05, JSD ’09, and Markéta Trimble Landová, JSM ’06, JSD ’10, who are both pursuing doctoral research on patents.

Fusco is zeroing in on the impact of patent protection on financial innovation. She is interested, in particular, in the aftereffects of the 1998 State Street Bank decision (State St. Bank & Trust Co. v. Signature Financial Group), which, in allowing a patent for consolidating different kinds of mutual funds, opened up the door to patenting mathematical formulas and business methods.

With that in mind, Fusco is trying to discover whether there is a correlation between securities innovation and patent applications. She has already created a database of new types of securities—for example, asset based securities—and examined patent applications submitted after State Street. While Fusco’s results are not conclusive yet, the data she has gathered suggests that innovation is happening regardless of whether people are applying for patents. This year the Kauffman Legal Research Fellowship will support the next stage of her research: conducting interviews with the producers and the consumers of securities products.

“I hope my research will shed light on the effect of the patent system on the financial industry and inform judges who have to decide the boundaries of patentability,” says Fusco.

Like Fusco, Trimble is doing empirical research—as she puts it, “complementing theory by seeing how things are working on the ground.” For her dissertation she is analyzing challenges patent owners face in enforcing their rights globally.

“In the past, most infringements were localized in one particular jurisdiction, but globalization and the Internet have changed that,” says Trimble. “Now a patent may be infringed by an entity that is not even located in the country where the patent is held.”

Trimble has identified roughly 90 U.S. cases filed in 2004 in which the sole defendant was a foreign entity. Her next step is to analyze the cases (How did they come about? Is the pressure to settle in these cases higher than usual?) and to interview the entities.

“I want to point out the difficulties companies have when they have to enforce patents and suggest possible mechanisms that the courts and others could use to approach patent enforcement in a more global way,” says Trimble, who notes that the European Union is currently weighing a proposal for a regional court system that would allow European patent litigation to be handled in a centralized manner.